diff --git a/internal/pkg_npm/packager.js b/internal/pkg_npm/packager.js
index ac41b58525..7ab0d7a517 100644
--- a/internal/pkg_npm/packager.js
+++ b/internal/pkg_npm/packager.js
@@ -31,7 +31,14 @@ function mkdirp(p) {
 
 function copyWithReplace(src, dest, substitutions, renameBuildFiles) {
   mkdirp(path.dirname(dest));
-  if (!isBinary(src)) {
+  if (fs.lstatSync(src).isDirectory()) {
+    const files = fs.readdirSync(src)
+    files.forEach((relativeChildSrc) => {
+      const childSrc = path.join(src, relativeChildSrc);
+      const childDest = path.join(dest, path.basename(childSrc));
+      copyWithReplace(childSrc, childDest, substitutions, renameBuildFiles);
+    });
+  } else if (!isBinary(src)) {
     let content = fs.readFileSync(src, {encoding: 'utf-8'});
     substitutions.forEach(r => {
       const [regexp, newvalue] = r;
diff --git a/internal/pkg_npm/test/BUILD.bazel b/internal/pkg_npm/test/BUILD.bazel
index 7a2440044a..516def1141 100644
--- a/internal/pkg_npm/test/BUILD.bazel
+++ b/internal/pkg_npm/test/BUILD.bazel
@@ -1,5 +1,6 @@
 load("@build_bazel_rules_nodejs//:index.bzl", "pkg_npm")
 load("@npm_bazel_jasmine//:index.from_src.bzl", "jasmine_node_test")
+load("@npm_bazel_rollup//:index.from_src.bzl", "rollup_bundle")
 load("@npm_bazel_typescript//:index.from_src.bzl", "ts_library")
 load("//internal/node:context.bzl", "node_context_data")
 load("//third_party/github.com/bazelbuild/bazel-skylib:rules/write_file.bzl", "write_file")
@@ -16,6 +17,15 @@ ts_library(
     data = ["data.json"],
 )
 
+rollup_bundle(
+    name = "rollup/bundle/subdirectory",
+    entry_points = {
+        "foo.ts": "index",
+    },
+    output_dir = True,
+    deps = [":ts_library"],
+)
+
 pkg_npm(
     name = "dependent_pkg",
     srcs = ["dependent_file"],
@@ -44,6 +54,7 @@ pkg_npm(
     deps = [
         ":bundle.min.js",
         ":produces_files",
+        ":rollup/bundle/subdirectory",
         ":ts_library",
         "@internal_npm_package_test_vendored_external//:ts_library",
     ],
diff --git a/internal/pkg_npm/test/pkg_npm.spec.js b/internal/pkg_npm/test/pkg_npm.spec.js
index 7da7c02ce5..99e5f00727 100644
--- a/internal/pkg_npm/test/pkg_npm.spec.js
+++ b/internal/pkg_npm/test/pkg_npm.spec.js
@@ -51,4 +51,7 @@ describe('pkg_npm srcs', () => {
          // TODO(alexeagle): there isn't a way to test this yet, because the pkg_npm under test
          // has to live in the root of the repository in order for external/foo to appear inside it
      });
+  it('copies entire contents of directories',
+     () => {expect(read('rollup/bundle/subdirectory/index.js'))
+                .toContain(`const a = '';\n\nexport { a }`)});
 });